Segway’s India business pegs hope on tech-savvy Modi

September 2, 2014

By Shashank Chouhan and Ankush Arora

People ride self-balancing Segway transportation devices past the Indian home ministry in New Delhi January 5, 2014. REUTERS/Anindito Mukherjee/Files

Among the companies hoping for tax credits from the business-friendly Bharatiya Janata Party since its election victory in May is the Indian distributor of the Segway Personal Transporter. The company hopes that the government will recognise the battery-run two-wheeler as a green vehicle, a move that could spur sales of the expensive device in a country where many people today cannot afford it.

The U.S.-based Segway Inc. was founded by Dean Kamen based on a vision to develop “high-efficient, zero emission transportation solutions” that are manoeuvrable and can be operated on sidewalks and pathways.

In 2002, Segway, adapted from the word segue that means “to transition smoothly from one state to another”, got the right to operate in over 30 states in the United States. By 2007, the New Hampshire-headquartered company had a worldwide presence in 60 countries, according to a report. It made its India debut in 2010.

Four years later, the Segway has a presence in Delhi, Mumbai and parts of the state of Maharashtra and southern India, including Bangalore. The company is building the vehicle in the city of Gurgaon just outside Delhi, and wants to sell it to airports, hotels, the police and upscale neighbourhoods, according to a top executive of the Bird Group, Segway’s Indian distributor.

However, the product’s steep price (a single unit costs between 400,000 to 500,000 rupees or around $8,000. For that price you can buy a sedan in India) in a price-sensitive market like India coupled with high customs and a lack of infrastructure weighs on the vehicle’s sales potential. The result – it has been confined to commercial and institutional use or at farmhouses or by tech-savvy rich people.

The self-balancing vehicle is being used in shopping malls such as the Ambience complexes in south Delhi and Gurgaon, the international airport in Delhi and to promote tourism at places like Ahmedabad’s Kankaria Lake. Many customers, Segway India said, have bought it for use at golf courses.

The customers and potential users that India Insight spoke with did not seem to mind the price. UR Nair, a senior executive in the luxury travel and IT industry, was planning to buy the Segway PT for the love of it.

“It’s something like you are asking a woman why would she buy a crazy handbag for 500,000 or 600,000 rupees. You don’t ask them, right?” he said, adding that the government’s encouragement to such technologies will augur well with the smart cities being planned in India.

Women ride two-wheeled self-balancing scooters past the Indian Defence Ministry, in New Delhi December 5, 2013. REUTERS/Anindito Mukherjee/Files Another customer, Vinod Singh Rajpurohit, decided to buy the ride for himself after he took a Segway tour of Rome – a guided tour that has been replicated in central Delhi since 2012. He said he would purchase at least four Segways for use in his furniture and handicraft factory in Rajasthan.

“I think it’s a toy, but ultimately it is a very useful toy,” Rajpurohit said.

Segway promoters see its growth in integrating their product with smart cities like Lavasa in Maharashtra and selling some to police forces. Police departments and security agencies, including the police in some Chinese cities, use the vehicle for patrolling.

“We have been pitching to the government to consider Segway as a green vehicle. There is a tax rebate on green vehicles purchase. We expect the government to seriously look into it,” said Rony Abraham, general manager at the Bird Group, the New Delhi-based diversified conglomerate that imports, assembles and sells Segway PTs through a fully owned subsidiary.

However, auto experts are divided over whether the vehicle can qualify for an exemption.

“It’s a kind of an off-road product so we need to see if it can come under National Electric Mobility program. However, I think it can be bundled well with (the) electric program if pitched properly,” said Puneet Gupta, Associate director, IHS Automotive. Launched by the previous government in 2013, the National Electric Mobility Mission Plan envisages better use of environment friendly vehicles by the year 2020.

But Saurabh Rohilla, deputy director at Society of Indian Automobile Manufacturers, said Segway PTs are not in the scope of the National Electric Mobility Mission Plan because they are not motor vehicles. Vehicles in India are regulated under the Motor Vehicles Act that recognises different types of vehicles.

Though Bird Segway broke even in 2011 and has sold up to 250 Segways in India, Segway Inc. refused to provide any specific projections, maintaining they had met their targets.

(Editing by Robert MacMillan; Follow Shashank Chouhan on Twitter @shashankchouhan and Ankush Arora @Ankush_patrakar and Robert @bobbymacReports | This article is website-exclusive and cannot be reproduced without permission)

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